China’s National Development and Reform Commission (NDRC) said on Wednesday that it will promote the digital transformation of traditional sectors which'd result in job creation.
The country will step up its efforts in developing different areas of high-tech including AI, big data, cloud computing, and Internet of Things to boost its digital economy, which was estimated to grow 18% to US$3.8 trillion last year according to the China Academy of Information and Communications Technology.
While this is seen as China’s move to seek growth opportunities outside exports when facing uncertainties brought by the escalating Sino-American trade war, Beijing has eyed to turn these high-tech areas into growth drivers long before that in its Made in China 2025 plan announced in 2015.
China has also stated that it aims to create a domestic AI market of RMB 1 trillion ($150 billion) by 2020 and become a world-leading AI center by 2030.
The country’s Ministry of Industry and Information Technology announced a three-year action plan for developing AI late last year. Key areas include intelligent vehicles, service robots, drones, medical image aided diagnosis systems, video and image identification systems, voice interaction systems, translation systems, smart home products, intelligent sensors, neural network chips, and open source platforms.
The NDRC said it will increase financing support to facilitate the growth of new industries such as drawing funds from capital markets.
One example is an agreement with major policy lender China Development Bank to offer US$14.55 billion to support the digital economy.
PwC: AI, other technologies to create 90 million new jobs in China
PwC recently said AI and related technologies such as robots, drones and autonomous vehicles could provide a net boost of about 12% to China’s employment over the next two decades, equating to around 90 million additional jobs.
“As China becomes more innovative and less imitative, Chinese industrial employment is likely to shift from lower value, labor-intensive production to higher value roles, including those involved in the manufacture of AI-enabled equipment for export as well as to meet rising domestic demand,” said James Chang, China Financial Services Consulting Leader, PwC China.
While the long-term net effect of AI on jobs will be positive for China, he warned that the transition to an AI-enabled economy could see considerable disruption to current labor markets as millions of workers need to switch careers and possibly locations.
“China’s ambitious Next Generation AI Plan targets heavy investment in skills development, but this will need to be balanced by increased retraining and support for displaced workers,” Chang advised.
China is projected to see 26% of its existing jobs getting displaced, said PwC.
This is higher than the job displacement in some more developed economies such as UK, which is projected to see a rate of 20%.
According to the firm, the higher level in China is due to the greater scope for further automation in manufacturing and agriculture.
However, this will be offset by the larger estimated boost to GDP in China from AI and related technologies, which will also feed through into much greater job creation in China (38%).